Pickup trucks, which have dominated the sales charts in the U.S. for several decades, are in steep decline. They’re not going to disappear, but the warning shots have been fired—the Toyota Camry sedan slipped into the number two spot in between Ford and Chevy’s pickups sales in April for the first time in recent history. Ford, the truck leader, reacted by cutting truck production by 15 percent in the second quarter with deeper cuts to follow in the latter half of the year.

But here’s the dilemma: Trucks are big moneymakers for Ford (and other automakers), so the company is reluctant to go cold turkey on the genre. Even if $4 gas has many folks rethinking whether they really need a full-size pickup, Ford thinks the utility of a pickup can still be a draw—if it’s made slightly smaller and more fuel-efficient. That was the genesis of the mini-truck—now called compact pickups—segment back in the 1970s, which saw Japanese manufacturers establish a new beachhead in America.

This time around Ford is looking at using technology to produce a truck with lighter weight and better fuel economy. Supplier and industry sources told Automotive News that the new truck, which will go into production in early 2011, will be sized between the current compact Ranger and the F-150. The vehicle could offer the fuel economy of the smaller truck with all of the towing and hauling capabilities of the larger one. To accomplish this goal, Ford will use a number of off-the-shelf efficiency strategies—“EcoBoost” in Ford marketing lingo—and will cut weight from the typically heavy pickup.